The decision means that state workers will receive their full paychecks for at the least the next two months (Ortiz, Sacramento Bee, 7/17).

Background

Although the new fiscal year began on July 1, state lawmakers have yet to reach an agreement on a budget plan. In response to the stalemate, Schwarzenegger ordered Chiang to reduce wages to $7.25 per hour for about 200,000 state workers (Steinhauer, New York Times, 7/16).

Under the governor's order, some state employees -- such as physicians and attorneys -- would have received no pay until a budget was passed because federal law exempts them from minimum wage rules (California Healthline, 7/8)

Chiang said he would not comply with the order because the state's antiquated computer system could not handle the minimum wage request and because the dramatic salary reductions could create legal problems for the stateÂ (Trujillo, Sacramento Business Journal, 7/16).

Although many computer experts agree that the payroll system is out-of-date, they also contend that reprogramming it to calculate the wage decreases likely could be accomplished in a few months (Dolan, Los Angeles Times, 7/19).

Ruling Details

In Friday's decision, Marlette said state workers could experience "serious and widespread financial hardship" if he ordered Chiang to reduce workers' pay before a hearing could be held to determine whether the state's payroll system could process the change.